S.Africa unemployment nears 26%

Workers improve a road opposite former South African President Nelson Mandela's home in Qunu on July 1. Almost 26 percent of South Africans are now out of work, according to official data released Tuesday, which showed a worsening of the country's already dire labour problems.
(AFP/File)

Women iron clothes at Peter Blond and Associates Clothing Factory in Elsiesriver, in Cape Town. Around 100,000 jobs were created in South Africa between April and June, but that was offset by a growing number of people returning to the job market to look for work.
(AFP/File)

PRETORIA, Gauteng (AFP) – Almost 26 percent of the South African workforce is now out of work, according to official data released Tuesday, which showed a worsening of the country's already dire labour problems.

The unemployment rate in the second quarter rose to 25.6 percent, from the 25.2 percent rate recorded in the first three months of the year, according to Statistics South Africa.

Around 4.7 million South Africans could not find employment, as lagging growth led to slow job creation.

Africa's largest economy expanded by just 0.9 percent at the beginning of the year, making employers hesitant, said Standard Bank analyst Johannes Khosa.

"It's not necessarily surprising (in) the current weak economic environment that companies are reluctant to expand capacity and employ more people," he said.

Around 100,000 jobs were created between April and June, but that was offset by a growing number of people returning to the job market to look for work.

Some took encouragement that the economy was still able to create 100,000 jobs.

"The domestic economy isn't as weak as had been suggested by the artificially weak GDP numbers in the first quarter," said Laura Campbell from analysis firm Econometrix.

Still, South Africa continues to underperform compared to other fast-growing countries in the region.

Labour analyst Daniel Silke laid the blame on the "policy paralysis" of the African National Congress government and its partner trade union Cosatu ahead of general elections next year.

"The unemployment figures reflect the inability of the ANC to clearly define policy and to bring its alliance partners into a concerted effort regarding job creation," he told AFP.

The agriculture sector saw a rise in jobs year-on-year but shed 26,000 posts between April and June, due in part to a new minimum wage that came into force following massive strikes in December and January.

"It's been unaffordable to many farmers," said Campbell.

"This high-percentage wage increase when they don't get commensurate productivity is bound to result in job losses in the sector."

The pressure on families also manifested itself in continued layoffs of domestic workers, a key source of low-skilled employment, said statistician-general Pali Lehohla.

"Given the squeeze that households are feeling right now it may well be that now, there is no more nanny," he said.

Analysts said they do not expect the figures to improve soon, especially while the economy remains exposed to weak growth in its largest trading partners: the EU and China.

"Those don't bode well for the manufacturing and mining sectors," said Khosa.